What Happened?
Shares of collaboration software company Atlassian (NASDAQ: TEAM) fell 6.7% in the morning session after an analyst at Macquarie lowered the price target on the stock.
The firm's analyst, Steve Koenig, reduced the price target to $240 from $250, a 4% decrease. This adjustment signaled a slightly less optimistic view of the stock's future price, which likely concerned investors. However, despite the lower target, the analyst maintained an "Outperform" rating on the shares. This suggested that while the immediate price expectation was tempered, the firm still believed the stock would perform well compared to the broader market.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Atlassian? Access our full analysis report here.
What Is The Market Telling Us
Atlassian’s shares are very volatile and have had 23 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 4 days ago when the stock gained 5% on the news that blockbuster quarterly results from tech titans Apple and Amazon boosted investor confidence, supported by impressive earnings from key cloud and crypto leaders, Cloudflare and Coinbase.
Amazon's shares surged after reporting that its cloud computing division, Amazon Web Services (AWS), saw revenue jump 20% year-over-year to $33 billion. This accelerated growth is largely attributed to the high demand for computing power required for artificial intelligence applications. Apple also contributed to the positive sentiment, topping its own quarterly estimates and forecasting a record-breaking holiday quarter. The strong performance from these industry leaders has lifted the broader market.
Impressive results from key cloud and crypto leaders, Cloudflare and Coinbase strongly supported the broader tech momentum. Cloudflare reported a "beat and raise" quarter with revenue soaring 30.7% year-over-year to $562 million and billings jumping nearly 40%, signaling strong future growth. Its non-GAAP operating margin expanded to 15.3%, and Free Cash Flow grew by nearly 60%, confirming management's efficient execution, leading the company to raise its full-year EPS guidance. Concurrently, Coinbase's third-quarter results also significantly topped estimates, driven by better-than-expected trading revenue and the increasing adoption of its stablecoin, USDC. The company reported $1.87 billion in revenue and an adjusted EPS of $1.44, while its strategic acquisition of Deribit advanced its "Everything Exchange" vision, resulting in over $840 billion in derivatives trading volume and aggressive expansion across the crypto market.
Atlassian is down 32.8% since the beginning of the year, and at $162.88 per share, it is trading 49.6% below its 52-week high of $322.94 from February 2025. Investors who bought $1,000 worth of Atlassian’s shares 5 years ago would now be looking at an investment worth $862.63.
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